Junta Governance

This article discusses the budget presented by the Junta and highlights which government agencies will be affected by the new budget cuts. Several departments like the Center for Diagnosis and Treatment (CDT) and the Department of Education (DOE) will be facing losses, with the CDT’s budget being reduced to 0 and the DOE facing at least $29.6 million. Other crucial agencies like the Fire Department, Medical Emergency Corps and the State Agency for Emergency Management are also going through cuts.

This article discusses the debate surrounding the elimination of Act No. 80, set in place on May 30th, 1976. This act ensures protection for workers in the private sector against unjustified dismissals. The protection includes a salary based on the amount of years of service that the employee gave to their employer only if the employer was unable to demonstrate a just cause for dismissal. However, the concept of a “just cause” dismissal in Puerto Rico was always different from the United States. Nonetheless, Act No. 80 was changed thoroughly through Act No. 4 of 2017 in an attempt to change reduce “just cause” dismissals.

This article discusses the pros and cons of repealing Act No. 80. It is predicted that while employers can lay off employees with ease, repealing Act No. 80 will result in more flexible labor standards, therefore creating more jobs on the island. La Junta agreed to repeal Act No. 80 in exchange for more money in the budget as well as ensuring Christmas bonuses and paid holiday and sick leave for their five-year fiscal plan.

This article discusses the imminent privatization of the Electric Power Authority (Autoridad de Energia Electrica-AEE) through Governor Ricardo Roselló’s Electricity System Transformation Law. The signing of this law will present Puerto Rico as a more competitive destination for power providers, therefore lowering the cost of energy. This bill will essentially limit the sale of assets to power generation plants. The legislature has maintained control during the process of privatization to ensure that sales contracts are approved by both chambers after passing a maximum 45 day evaluation period.

This article discusses Governor Ricardo Rosselló’s request to limit the powers of la Junta through a lawsuit filed in early July, arguing that the board usurps his administrative and legislative powers. Roselló also asks for the federal district judge to issue a ruling preventing members of la Junta from usurping powers from other elected officials. .

This article goes looks at who makes up la Junta: a fiscal control team made up of 200 lawyers, consultants and contractors who, in total, have cost Puerto Rican taxpayers at least $80 million. Natalie Jaresko, the Board’s executive director justifies the $80 million bill, stating that “Puerto Rico’s problems are very complex, they are unique”. Despite the fact that the board is supposed to be a temporary organization, it is unclear how long the restructuring of the debt will take. In the meantime, la Junta continues to be a thorn in the side of the commonwealth as fees exceeded initial projections. One can argue that these fees cause further damage, with the average hourly rate for the consultants, lawyers, and contractors being around $700, however, much of this money leaves the island. La Junta is considered by Valentin to be a parallel government, as they advise on everything from macroeconomic projects to budget/fiscal plans, resulting in budget cuts and adjustments to governmental programs (schools, law enforcement, PREPA, etc.) As time goes on, la Junta continues its restructuring of the debt, increases in expenses are expected, as la Junta plans to open a third office in DC and open 11 new positions

This article outlines la Junta’s new fiscal plan and its potential social impact. The plan aims to create a program of structural reforms, a fiscal consolidation program, and a reconstruction program financed by the federal government. These programs will use the recovery attempts of Hurricane Maria and the resulting increase in economic activity to implement the fiscal austerity plan. La Junta feels that although the plan will have a small immediate negative impact on the economy, the long-term effects will be worth it. Marxuach argues that the plan is based on a theory of macroeconomics that has failed in many countries, and as a result, may fail in Puerto Rico. However optimistic the projections are, Marxuach’s concern lies with the social costs of implementing the new plan; namely, the cuts and restrictions to many government departments and programs. The Department of Education and the University of Puerto Rico are facing cuts despite the fact that investing in education is one of the key factors of economic growth. These cuts will mainly negatively impact the poorest of Puerto Rico, resulting in an increased dropout rate and may permanently stunt the growth of the economy. The plan also proposes a labor reform that will eliminate “excessive” benefits and protections in exchange for a slight increase in the minimum wage. While the plan predicts that the reform will result in an increase in the participation rate of the labor force, this will leave the most vulnerable communities open to risks like unjustified dismissal and dangerous working conditions. The program also requires that certain beneficiaries of the Nutritional Assistance Program (PAN) work at least 80 hours a month or take part in training/volunteer services. This policy is not only classist, but it is too broad to apply to all beneficiaries of PAN. The plan will also affect the pension system in place: a cut of around 10% will be taken from retirees benefits. This will result in many retirees seeking to supplement the cuts by other means, or cutting back on expenses themselves(medical care, food, etc). The cuts to health care are projected to be $840 million by the year 2023, by introducing a competition model amongst insurers, generic medicine, and cuts in premium benefits like dental. Like the rest of the plan, the cuts in health will negatively impact the poorest of Puerto Rico the most.